In-House or Offshore Software Development Team | How to Choose?

Recent studies project a significant increase in demand for software engineers, QA experts, and testers over the next decade. In fact, it is estimated that the demand for these roles will rise by 25% between 2021 and 2031. Additionally, around 25% of executives currently utilize an outsourcing model for their IT projects.

In comparison with an internal software development team or department, offshore development is the process of enlisting the services of a software development provider from a different geographic location or country. Experts from Belitsoft help discover which approach is most appropriate for your business.

Various Models of Offshore Software Development

4 models are shown below –

1. Custom Software Development Team Extension. This will augment the capabilities of your existing in-house development unit. Consider it to better align with the current project scope and stage. 

2. Remote Development Center. Consider moving your software development operations to any location to work with highly skilled developers.

3. Managed POD (Product-Oriented Delivery) team. Outsourcing your product development tasks to a Managed POD will allow you to focus on priorities and results instead of controlling employees.

4. Dedicated Team. Consider the option of building a remote development team and using your preferred tools and methods to collaborate with your software engineers.

Nearshore versus Offshore Development Team: Which is Right For You?

Nearshore outsourcing entails partnering with development companies in nearby countries, bridging the gap between offshore and onshore models.

Collaborating with a nearshore development team has several benefits, such as:

• Minimal time zone differences
• Lower development costs due to lower salaries
• Fewer cultural differences and language barriers
• Increased opportunities for regular visits, leading to a more transparent relationship.

Offshore outsourcing involves delegating work to a team located overseas by the in-house business. Despite the geographical distance, offshore software development teams offer several advantages, such as:

• access to a global talent pool
• experienced specialists at lower costs
• availability of experts for a full range of services
• high-quality work delivered within the expected timelines.

Who Usually Needs an Offshore Development Team

The necessity of an offshore development team is shown below –

1. Startups 

Startups often encounter challenges in certain areas of development due to their limited knowledge and experience. To address these challenges, offshoring can be a viable option by hiring team members with specific skills. Moreover, startups typically have limited budgets, making it difficult to hire local experts at affordable rates. Offshore software development teams can help overcome this obstacle by providing access to top talent at lower costs compared to local hiring.

2. SMEs

For small and medium-sized enterprises (SMEs), outsourcing can be a cost-saving solution when undergoing product testing or upgrades. Hiring an outsourcing team allows SMEs to attain a team of professionals or specialists for a specific period to accomplish a particular goal and move forward. Moreover, when SMEs have existing internal staff, offshoring can be valuable when they require a specialist with a particular skill set. By choosing to go offshore, companies can access a vast pool of skills from around the world.

The Most Common Scenarios to Consider Offshore Development Team

Considering factors are shown below –

1. When it is Challenging to Find the Necessary Developers Locally

Whether you create a new software product or maintain your existing development capabilities, having a team with the right talents in your field is essential. However, finding the required software engineers can be tricky, especially in the current alarming situation. A third of US companies are reporting difficulty in locating the needed talents, and the numbers have been significant for over a decade. The global pool of developers is vast, making it possible to acquire offshore dedicated professionals with the necessary tech skills, which fast-pacing companies are doing to remain competitive today.

2. Your Company Is Spending More Than Necessary by Expanding Your In-House Development Team

When looking for developers to work on your project, you may encounter high rates for senior-level developers in the USA or the EU, which can affect your budget. Outsourcing your project to an offshore team can optimize your expenditures, and you will get high-quality results while staying within your planned budget. According to a study by Deloitte, 70% of companies opt for outsourcing their software development projects to save costs. 

3. If Your Project Has Specific Requirements and Needs Maximum Team Agility

For example, you have a short-term project or a complex project that requires fast scaling and constantly hiring and onboarding new team members. It can be time-consuming and costly. Also, it can affect your ability to deliver quality software within tight deadlines, which can hurt your business in the long run. Offshore software vendors provide access to a global talent pool, which can help you quickly find the right specialists and settle on their rates. That allows maximum team flexibility, without the burden of long recruiting and onboarding processes.

4. If You Require Additional Resources to Swiftly and Efficiently Grow Your Business

As your business grows, so does the need for additional resources, including software and infrastructure, recruitment, and support. However, the upfront investment required for scaling can be very high, making the process slow and inefficient, leaving no room for error. An offshore software development team can help you overcome this challenge by handling all operational processes. Instead, you can pay a relatively low monthly rate, freeing up your resources for strategic growth and agility. This way, you can allocate your financial resources wisely, focusing on marketing and improving your product or service, while a team of dedicated developers works remotely to benefit your business.

To Summarize

There is an increasing demand for software development experts, and about 25% of executives currently use an outsourcing model for their IT projects. Nearshore and offshore outsourcing both have benefits depending on the company’s needs. Offshore development is a viable option for startups, SMEs, and companies struggling to find the necessary talent locally, while also being cost-effective. Offshore development teams can provide additional resources for fast and efficient growth, making it an ideal option for companies looking to allocate their financial resources wisely.